As it should & ought to be...

@rohangrey is an MMTer who spent some time on twitter poking around my Guaranteed Income / Choose Your Boss plan (GI CYB).

The upshot is he got Warren Mosler to read my plan and respond.

READ HIS RESPONSE PLEASE.  To regular upstanding folk, I apologize this post is going to use a bunch of jargon that only oddballs and social curiosities geek out on. 

GI CYB is essentially the MicroEcon Husband to NGDPLT, the MacroEcon wife.

Sumner’s NGDPLT alters the discussion in a way that Austrians don’t love, but they recognize its hammer value to smash the feet of fake Keynesians. 

Note: Most folks who claim to be Keynesians are liars, to be a real devotee, you have to show us you were screaming not to grow govt. when Bill Clinton was POTUS.  It’s better to just admit you are anti-business, want a bigger state even if it is bloated and provably inefficient and be done with it.

Similarly, Austrians don’t love GI CYB, since it accepts the social commitment that all citizens in a state must have their nut covered - paid for by others using taxes.  BUT once you grant that one affordable demand, GI CYB allows you to expose all kinds of other hidden agendas inside an Economist’s babble.

——-

Mosler’s approach to GI is the govt. prints money and hires the unemployed, decides the kinds of jobs they should be doing, how much to pay them ($8 per hour),  and then also judges them on whether they have done a good job.  And when the economy heats up, the govt. taxes some other people of its own selection based on its own ideals.

It’s disgusting.  It makes me throw up in my mouth.   The less deciderism the govt. engages in, the better off we all are.   Technocrats are self dealers.  Enough said.

While Mosler may be able to describe the flow of money, he makes a more fundamental mistake: In a global economy, wages are not the correct tool to provide a state’s social safety net.

But right off the bat we see the weakness of Macro guys talking about GI, as theirs requires a total US solution.  It requires a total rewrite of US Constitution, and probably an outright civil war, whereas GI CYB can be deployed in Texas or Indiana without even chatting with the Fed.

But moving on…

His main frame is Sultans and their Fanners.  His concern is that people with money get to buy up the unemployed.  He fears a yacht based economy.

This simply doesn’t happen:

1. GI CYB limits the distance labor must travel for work, this is a single input variable (1 mile, 5 miles, etc) on a software platform that alone limits who can buy.
2. I directly encode smallness into GI CYB by limiting the pool of potential buyers to essentially individuals and small businesses. I’m a distributist. 
   
3. This leads to blue collar entrepreneurs moving into ghettos and entrepreneurship amongst the folks on GI.  It creates A LOT of economic mobility (we’ll get into that at the end).

Endeavoring to be charitable to Mosler, I’d try to make him understand the oligarchs will hate GI CYB.  Any Fortune 1000 company that pays low wages today, will have to pay a wage premium to keep their workforce from quitting and joining GI CYB.

It does seem the Mosler makes the same kind of mistake that Matt Yglasias makes about labor prices: when prices go down, consumption increases.  There’s really no such thing as inelastic demand in labor.  And at $40 per week, we’re talking about a MASSIVE price change, not a little incremental one.

Which gets to the deeper meat of Mosler’s mindset:

jobs that produce output for sale are a function of sales. this doesn’t increase sales other than via increased govt deficit spending for this program. 

GI CYB reduces total govt spending AND puts everyone to work AND increases overall consumption.  The nominal aggregate doesn’t matter just this once.  Macro guys ride in the back.

Essentially, when you take a bat to sticky wages and structure your state’s economy around liquidating every resource at the low end, squeezing the juice out of every human asset, there will be blood on the street while everyone adjusts once, but this is happening during the wild cowboy days of the new American economy….

Its the gold rush and dismantling the fed, and whipping Wall Street, and changing the dynamics of international markets and foreign labor, while your state is kicking serious ass.

Note: When you are watching the shell game of economics keep your eye on consumption.  As long as overall human consumption, particularly with the poor goes up, you are in salad days.

I think the easiest way to try and crack through to MMTers and Progressives in general is this argument:

GI CYB not only gives recipients in ghettos a nominal amount of $, it reduces the costs of the things they are buying, so they get a consumption twofer.  Its higher Power Purchasing Parity except the GI is priced against American wages. 

DISTRIBUTISM: capitalism that groks the 80 /20 rule 

Mosler posits that we’d see everyone jump into the GI plan:

“my quick guestimate tells me the dynamics will tend to drive pretty much everyone into the auction in a massive shift to a sultan/sultan fanner economy. Cost sensitive businesses will tend to ‘replace’ as many workers as possible with auction workers, which tends to reduce aggregate demand/increase ‘savings desires’ and thereby intensify the shift to auction work.”

And I want to be clear about this.  It won’t happen, but that would be fine with me.  And he is right that when Texas does this, other states will have to follow, as the unemployed and entrepreneurs flood in.

I’m a distributist.  Think of it like franchisees.  I don’t mind if there are national chains, but I want each store to have a different owner.

I’d be fine with each McDonalds having a unique owner who maxes out on low cost GI recipients because:

1. He’s still going to have to bid HIGHER to get long term employees.
2. After he hits $3M in income (some variable set by state),  he can’t use the system to hire more.

I fully understand that this creates a certain amount of inefficiency in the economy, BUT I claim two hard core advantages:

1. Big Government is a unmeasured negative externality to Big Business.  By weakening the Fortune 1000 against a million richer SMB owners, we reduce the power of DC vs. states.  Think of this as making America anti-fragile.
2. What matters is the wealth disparity among the top 20%.

The top 20% deliver 80% of the economy. The bottom 80% will work in service to the top 20%.

I know it sucks to hear this.  Get over it.

Note Izabella Kaminska: We’re not going to tell the top 20% to work less…. we want them to work 80+ hours a week, they NEED support!  There’s plenty the bottom 80% can do for 40 hours a week to keep the 20% going.  And my GI CYB delivers for far more hedons than your imaginary leisure society.  Please hippies get this through your head… increasing work increases consumption, and consumption is what matters.

BUT, we can be glad that more than 1/3 will spend some of their earning lifetime time in the top 20%.

We can also cheer that GI CYB increases economic mobility, we should want 1/2 or more to spend some time in top 20%.

My point is, Mosler and many of the left like to talk about Sultan / Fanners or 1% and 99%, but if  they really care about it…

They’d be focusing on how to get the wealth of the top 20% distributed more evenly among the top 20%:

1. Because then there are more customers who want yoga lessons and manicures.
2. Because the top 1/3, who self identify in the top 20%, have the political muscle to whip the 1%.
3. Because 1/3 (I think it can be 1/2) are not SULTANS nor are they OLIGARCHS, they are the top third or half kids in school.
4. Because we’re not commies, and grasping reality with both hands means admitting that the folks who own their homes and run the churches and the PTAs and own the SMBs and 300M guns, they are the best kind of people, the kind we want to give VETO power over econ bloggers and college professors…. who don’t mind Sultans as long as their technocracy get to be in the 1%.

And now I’m going to ask @interfluidity for some feedback… I’ll keep editing this.

I used to sit and watch Breitbart do the Drudge Report at a bar in Venice Beach.  Before that I watched it via IM.  Early on they had access to the newswires, so they’d KNOW there was an article, but they’d have to search web to find it, so they could link to it.

This was even before you started to see MyWay get lots of drudge links.

Drew had all the State and International newswires bookmarked and he’d be checking them all, panning for gold.

Then when he set up Breitbart.com (before the ad network contract fiasco) he went and cut deals with AP and Reuters, so I got to hear about those negotiations.

That’s when this idea presented itself.

If you approach AP and say you want to licence “all the news” they’ll play along, and give you a bunch of topical bundles, but you cannot actually get the 16K articles they have each day.

Note: Last I checked, the total load of articles from all the wires was like 40K total.

Why won’t they give you all the articles?

Because it violates the premise of syndication.

If there is one place that has every single article, everybody goes there, and the AP has no online business model.

The AP thrives on thousands of paying customers  and nobody having the whole enchilada.

——-

The way to save local news is to destroy the AP biz model:

• Article: For each article a shortened master-link is created.
• Resolves: Every blogger when they link to an article, the link resolves back down to master-link.
• Cookie: The master-link sends every reader to the local paper of their choice (use geo-ip by default).
• Every local paper has all 16K articles every day.

Now the local papers have everyone in their community reading every news articles at their site, all day long.

You live in Canton, Ohio, you click a AP link at Drudge, it goes to The Canton Repository.  You click a AP link at any blog, any aggregator, and it goes to… The Canton Repository.

Since your local paper now has guaranteed highly sorted traffic, newspapers can newly compete with Craigslist on freemium classifieds, and crazy new stuff like get national brands doing coop advertising with local retailers.

This is really just a nudge, you can read any paper as your default, or if you are a traveller, just find yourself at the local paper of market you are in.

Suddenly, local papers have online models that pay for real local reporters to cover local news.  So instead of Kauffman Foundation playing around with grants and AOL blowing cash on Patch, we let online readers who LOVE their own small town, Read Local.

——-

I’m pretty sure, somebody could force the AP into this model and make money doing it.

It’s entirely possible to reverse engineer the total bundle of 16K articles the AP has, sit spiders on the sites that get those bundles, and come away with 16K headlines every day.

Now you have a copy of AP newswire to offer bloggers, and you get to decide, just like Drudge, who gets the link. (payday $)

Note: this specifically gets around the recent AP court case 

Which brings me to the last part of story, when Drew did deal with Reuters  he started to get good traffic from Drudge, and Reuters basically voided their contract after one month, and then offered him a deal where Reuters would host the articles and pay drew for the trafic.

I’m pretty sure Google News is trying to walk this line as well… I think they know they could ruin AP and don’t want the baggage. 

But Local Papers can work just fine on the Internet if we want them to, but the member papers that own the AP would have to end the business practice of syndication and put all the news wherever the reader wants to read it.

Let me start with my bonafides. The majority of my business partners / co-founders have been gay.  I once was deeply involved in the gay circuit party scene on the West Coast, for a while we routinely whooped Jeff Sanker head to head.  A night out in Austin routinely finds my wife dancing while I’m chatting or reading Kindle on my phone at Rain… it takes a few drinks for me to dance anywhere.

Some basics:

I think we ought to give gays President’s Day as their national holiday. Because Lincoln.

I’m absolutely convinced gays will continue to vote in greater numbers for Republicans.  If you are wealthy and feel like you have to vote for higher taxes, you are not equal.

I favor gays getting married and having children.  What’s more I’d use tax laws to NUDGE single parents (gay and straight) to marry.

The business of contractual cohabitation is ultimately for children. The benefits doled out by the state, say out loud,”We want you to have kids, and we vastly prefer each child have two parents in the home.” 

When it comes to benefits, I want every state to recognize gay “marriage.”  

I’d even support a Constitutional Amendment to codify a civil contract between two people that gains special status in the eyes of state.  But, I wouldn’t call it marriage, because I think states shouldn’t be in the marrying business.  Marriage is a church thing and even most secular wonks should’t want to horn in on religious institutions, its rude and not wonky at all. 

Note to Erick Erickson arguing there is no stopping gays:  Push a Constitutional Amendment that gets states out of “marriage” business, puts them in the cohabitation contract business, keep it between two people, for both straights and gays, and it will pass.

——

Early on, Rand Paul got in trouble with the left for the principled argument that businesses owners should be free to discriminate.

He was right.  But he got hung up on the civil rights movement.

His correct argument is that states shouldn’t be able to pass laws that discriminate against free speech any more than they should be able to have Jim Crow laws.

But there’s a stronger point to be made.  Today we have the Internet.

And gay rights have exploded state to state BECAUSE of the Internet.

And here’s the kicker: if we had the Internet in 1945, we wouldn’t have needed the Civil Rights Act by 1964.

Southern states would have been far more modern if they were online from 1945-1964.

Now you can argue that the Internet hasn’t ended racism, but that’s not responsive.

The point is we have before us PROOF that technology solves cultural problems far faster than laws and politicians. 

Because of the Internet, we should have stronger free speech rights than we did in 1964.

Because of the Internet, we should seek state-by-state solutions, even more than we did in 1964.

——

So let’s get back to Gay “marriage.”

I’m a huge fan.

I also know that letting each state decide on their own to accept gay “marriage” is most important today BECAUSE of the Internet.   Think of this like letting each state come out on it own terms.

Gays must admit the Internet has given them marriage rights in blue states, and trust it to give them marriage rights in red states.  

Gays didn’t get those rights from Pelosi or Obama or political donations, those are all secondary forces.  The Internet is their best friend, it loves them most.

Gays must express their gratitude and trust in the Internet because the Internet let them make their case to America for free.

Trusting the Internet means trusting in states rights.

There is no greater danger to the Internet, and her succulent fruits, than a strong central US Government.  And we must certainly acknowledge a strong central US government puts us closer to a World Government, which hates our Internet.

Like the Internet, at its core the United States is a distributed system.  We are networked, we are joined, we are united.  But, our Operating System indeed our BIOS spins up states first and foremost as their own unique machines.

We have jaw dropping proof today that distributed systems deliver positive social outcomes faster and both social cons and results oriented progressives should put their faith in state’s rights, because that’s putting their faith in the Internet.

Dance with the one that brung ya gays, let the Internet work her magic.

With the GOP Autopsy out and so light on tech and so light on cutting the consultants down to size, I want to layout the correct thing to give the base something to demand, and point back to when it doesn’t happen, so I can say “I was right.”

First of all it is a campaign dashboard.  And every single candidate for Republican office gets to use it.  It has a shared database of 115M households.  Every household in America.

A candidate upon registering to run for Perry Township Trustee as a Republican, is issued dashboard log-in credentials and they can see their entire township laid out before them.

A candidate running for Travis County Sheriff as Republican, is issued dashboard log-in credentials and their can see their entire county laid out before them.

A candiate running for…. you get the idea.  Every candidate sees everything the GOP knows about the area they are running in. Street by street, home by home, they can see:

• names, ages, sex, marital status, etc of occupants
• registered party affiliation
• known voting history of each occupant
• published phone numbers
• links to Facebook pages, twitter accounts, pinterest pages, everything known and published on the social web.
• all known employers
• all past political donations

This is just a small start.  Whats also available is purchasable third party sku-level data from over 1000 retailers, credit card companies, and all known info traders.  Swipe the credit card, and the GOP candiate can see what the people in each home buy at every store that has a loyalty card.

Deeper still working from set-top-box data on 50 million TV viewers fused with Nielsen, MRI, and Kantar—along with access to TV ad inventory reaching 115 million homes the dashboard will give strong predictions on what TV networks and shows the people in the households watch, what radio stations they listen to.  

Deeper still the platform uses the retail data against store locations and employment location, to establish exactly where these people shop, the routes they likely drive, so that you have a idea where place signs and proselytize in person.

Lifestyle and issued based messaging suggestions from the Luntz’s of the world are offered up based on household psychographics.  There are 60+ types of Americans, they don’t all live in a given campaign area, but more than a few types live in any given zip code.

But wait there’s more!

• A gorgeous campaign web site
• Takes donations online and reports to FEC.
• Takes scanned photos of checks, deposits and reports them.
• Drives countless gps tracked mobile apps for GOTV, canvassing, signature gathering, banging the tin cup.
• Makes, connects, records, and tracks all calls and conferences.
• The system builds volunteer lists.
• Gives volunteers their own dashboard to manage their own activities, contacts, etc.
• Gamifies and rewards volunteers for achievements.
• Tracks social media mentions, photos, views, etc.
• Pays and tracks all campaign staff via direct deposit.
• All campaign staff use the dashboard to both do their work and have their work tracked.
• Event halls, hotels, etc. past rates paid, all exposed and reported on purchase.

The Ad Platform

It’s also an ad network and ad buying platform.  Every email sent by the platform when clicked carries a cookie that follows the recipient in the household everywhere else they go online.

ALL candidates using the platform, who count that house in their running area, can now contact that web surfer with display advertising in any web page online - all hosted and served by the GOP.

From the dashboard, candidates can request political ad rates from cable, networks, etc, make buys in radio, outdoor, and all requests are immediately filed with the FCC and spending registered with FEC via their respective APIs.

In the dashboard, they will find lowest cost providers of signs and chotskies, along with the ability to personalize  send art, order,  and track shipping of the campaign materials.

There is of course more the platform does, it gives the candidate a map based representation of their work to date.  How many ads have a given household seen?  Has there been an increase in donations?  Is a neighborhood lagging against previous performance. 

I can go on and on.

And that’s really the point.  It’s all part of the new rule, GOPENSOURCE.

ANYTHING DONE by any GOP candidate to extend the platform, becomes the property of the platform and all future GOP candidates, after the election.

Consultants and Their New Job

First and foremost, no consultant will ever be able to argue they are technical wizards:

1. Because they aren’t.  Real tech wizards create Internet start ups.
2. Because no consultant’s technology will outperform GOPENSOURCE.

Instead, tech consultants will boast about how great they are at BUILDING NEW THINGS to exploit new technologies that are part of the ever expanding GOPENSOURCE.

Note that my rule here means a “tech consultant” actually has to be able to write code, since the code is being contributed to the project after the election. The business of hawking the same batch of wares over and over, and covering your own nut for years, floats away from consultants.  

Let me say it again, coders get paid to write new code.  Old code doesn’t get sold again and again. Platform license fees evaporate.

This doesn’t mean there still aren’t pollsters, media buyers, etc, it simply means that their work is all exposed INSIDE GOPENSOURCE.  

Think of this like Salesforce.com meets Mechanical Turk, where all consultants are human app providers plugged into the machine.  Except of course, we have a system view of each human app’s results, feedback, etc.  We know what they charge, and we know how effective they are.

The New Political Animal Candidate 

GOP candidates now have a far more level playing field.

Young guns who can sit down and play with the campaign dashboard, master it’s capabilities AND working with coders have new tech spun up to take advantage of some exclusive toolset during this cycle, will have new weaponry to take down the candidates who don’t get it.

Primaries will favor money-raising less and favor data-insight and Internet mastery more.

Upon close of a primary, all actions taken and code written by the losing GOP candidates folds into the view of the winning candidate. 

Candidates are ranked and reported based on their mastery of this platform.  A candidate who barely loses and was horrible at GOPENSOURCE likely has some big gains to make in another election cycle… if they get with the program.

 ——-

Now granted, this system isn’t cheap.  But it saves the GOP BILLIONS of dollars.

It shouldn’t cost more than $10M to build the first working platform before 2014. That’s 25 dead serious coders being offered $400K per year.

The best of them, maybe all are kept on, to oversee new submissions to the platform.

I’m not saying it only costs $10M a year, every candidate brings their own coders to the table.  Coders who have a history of making strong stuff that gets committed to GOPENSOURCE, build careers on giving candidates new and better weapons.  

Innovations by lesser coders even matter.

As an example, let’s say a mom candidate for state representative wants to go big on having volunteers throw coffees at their homes, and gamifying the results.  She pays web coder who builds a web app on GOPENSOURCE that does this.  After the election, that app is property of GOPENSOURCE, but parts of code itself was really done poorly so it ran slowly, the task for our in house top notch coders it to replicate it, but clean it up, normalize it.  Now forever, all GOP candidates have volunteer_coffee.app to put to work.

As tech goes, thiis all the new real time highly scalable web app stuff that does’t really distinguish between mobile, tablet, and desktop: MVC, node.js, mongo, RoR, sockets, et al and uses LOTS of web services and APIs.

The goal isn’t to rebuild Meetup, or Twilio or WayIn the goal is to use them, but not depend on them.  If something better, cheaper, etc. pops up, use that.

The philosophy here is that GOPENSOURCE is the new GOP. Candidates receive no national or state political funds if they aren’t using GOPENSOURCE.

The entire party apparatus is one big Internet evolving platform.

Donors can see performance metrics, see the decision making documented sometimes before and sometimes after the fact.

The serious volunteers can prove the value of what they did for the campaign, and essentially demand the power they should be afforded.

There’s been a lot of chatter in the econblogoshere around the idea of a basic income, what we’ll call a Guaranteed Income.

Herein, I’ll explain the way it works.  There’s only one way it works.  Deviations on the idea without the requirement to choose a private sector job offer ruin it immediately.

Milton Friedman walked away from a Negative Income Tax because it wasn’t a full replacement for the social safety net.  This is that exact situation.  We either do it my way, or it won’t work, and isn’t worth doing.

The Basic Plan

Using the Paypal and Monster.com style platforms, the US govt. should establish a Guaranteed Income of $240 per week. Anyone who wants to work registers, receives a Paypal Debit Card, and each Friday at 5PM has their GI deposited.

All GI recipients must choose from hundreds of jobs being offered to them each week.  If you don’t choose a job and work, you don’t get your GI.

After their first year, recipients get one week vacation with GI annually.

Job offers begin at $40 per week ($1 per hour).  Offers increase by 50 cents per hour ($20 increments).

First fact: At $40 per week, there’s no able bodied / able minded person that some rational returns bidder won’t find use for.  The 74 yr old woman in a wheelchair who wants to work to keep busy?  Plenty of teleservice operators have work for her to do from home for $1 per hour.

Note: I solve for the criminally lazy.  Identifying and fixing them is one of my plan’s advantages. I’ll get to it a bit later in the What Abouts plan.

So minimum take home cash under GI is $7 per hour or $280.  $240 is the social commitment paid out of taxes and $40 is the winning job offer.

To perfectly align incentives, for each $20 per week offer increase over $40, the govt. gets back $10 of our $240 social commitment, and the auctioned employed keeps $10.

So, on a offer of $100, the govt. is paying $210 and the auctioned receives $310.  A offer of $200, hits the govt. for $160 and auctioned receives $360.

The system ends at $10 per hour.  The maximum offer allowed in the GI Auction is $280 and the govt. is still kicking $120 netting the auctioned $400 per week.

Here is the actual schedule I’m suggesting:

Winning BID        GI paid by govt.              Payday: GI + BID
$40                      $240                               $280
$60                      $230                               $290
$80                      $220                               $300
$100                    $210                               $310
$120                    $200                               $320
$140                    $190                               $330
$160                    $180                               $340
$180                    $170                               $350
$200                    $160                               $360
$220                    $150                               $370
$240                    $140                               $380
$260                    $130                               $390
$280                    $120                               $400

At this point people tend to have lots of questions.  Since I’m writing this to woo progressives let’s start here.  Companies like WalMart will now  need to pay more than $400 a week, to keep workers from choosing GI.

Here are the basic rules:

1. Recipients can choose to take lower paying jobs.
2. Recipients cannot be made to work outside a radius of 5 miles.  This is a guesstimate.
3. Bidders must also establish their real identity and deposit money into system before they bid.  No more craigslist roofing scams paying after the fact.
4. Bidders and auctioned cannot be related or cohabitating.
5. Bidders must accurately describe the job (check boxes) and cannot add to it after winning bid or require work not checked.
6. Feedback will be given both ways. If you are familiar with Ebay buyer / seller feedback, you understand what this accomplishes.  It makes it the whole thing work.   If you are not familiar with Ebay, get familiar with it before you state your opinion on this plan.
7. There are no taxes paid by employer or employee.  There are basic workplace protection requirements. Umbrella insurance is sold on Ebay for folks bringing labor into their home.
8. Upon meeting some fair criteria, the criminally lazy can be suspended from GI program. Perhaps 6 weeks as first suspension.
9. Only individuals and incorporated SMBs earning less than $3M per year can bid.   This is not subsidized labor for Fortune 1000.  Under this plan, their labor costs go up.  I am proposing Internet based #Distributism.

The costs

Expect 30M to register so approx $375B is our cost assuming 30M are auctioned at $1. This is of course lower than the market will bear.  At an avg. bid of $3 per hour the govt. is spending $312B per year.  At $5 per hour, the govt. is spending $250B per year.

There is no more unemployment insurance.  There is no more minimum wage.  That’s why there are 30M in program.

If you quit / lose your fulltime regular job, you stay out of the GI program for as long as you wish and can afford to.

The savings on ending UI alone, CBO places at $94B for 2012.

The savings from productivity gains in public sector that currently administers unemployment benefits at federal and state levels, I’m putting at $20B+ for 2012.

The economic growth from this is of course ginormous.  Since we have no unemployment, the only task of the Federal Reserve will be to keep us from productivity driven deflation, at first there will be some too. This means an end to QE and a much quicker end to the bad debt crisis.  


Policy goals

The goal here is to put the greed of private bidders to work to quickly identify which of the 30M are best at the jobs they are happily put too.   When a family hires a babysitter, and after 6 weeks they have consistently rebid, that is known, expect the market to quickly clear to find the correct price of babysitters – trust the ones who clean to earn more.

The goal is a fuzzy system with less rules, so a neighborhood with 30 dog owners can offer $120 for someone to clean up their yards ($4 a yard), and the guy taking the job knows he can do all 30 yards in 15 hours, netting him $21 per hour for picking up dog shit.

The goal is Internet transparency. Workers and Bidders are encouraged to take pictures and video, document before and after, week after week.  Consistent bidders with plenty of previous happy workers carry far more weight in judging employees than those with spotty records.  If you don’t understand this, go buy and sell some stuff on Ebay.

Note the steep increase in happiness and labor relations: plenty of bosses now are LIKED but they can’t afford to keep good workers – this is a big change.  Good yet marginal workers now have many, many choices, where their own happiness is given much greater weight without ANY technocrat’s big agenda.

The upside is ENORMOUS.

1. While the govt. can’t bid it can now hire low cost services organized by SMB that hire from this pool. Suddenly the cost of public goods (clean parks, subways, etc) drops dramatically – making the cost of LOCAL GOVT. cheaper. This alone likely covers the total expenditure.
2. This is about recovering lost American productivity.  This isn’t about just the 30M. This is about how you and I become more productive when we can use the 30M to accomplish more ourselves, and what those we work for can do with our new productivity.
3. Because GI recipients will disproportionately fall in certain areas, entrepreneurs in these markets suddenly have a labor advantage that is real.  Businesses that want to hire need to move into these areas.  That whip smart drug dealer in the towers?  He’s got a 30 story building full of low cost labor to organize and monetize.
4. The signalling to the unemployed is REAL economics. This is not the unemployed doing socially valuable shit that Technocrats in DC thinks matters, this is 30M seeing what pays what in a sustainable way.  There’s a real difference between what’s worth $2, $5, and $8 per hour.
5. The cost of goods and services in poor areas drops dramatically. Suddenly ghettos are cleaned up, properties are improved. Daycare drops to $50 a week.   This is a super positive PPP in our sickest urban centers. Slums no longer are slums.
6. Overtime, this program allows us to move all aid like Housing, Energy Assistance and Foodstamps into it (even healthcare). If you are working for a boss who thinks you are worth the market rate, we’ll cover your nut. Otherwise, you are in trouble.
7. This program gives us a clear path to extending the age of retirement, first by choice, and slowly by law. It lets us ask even the disabled to work from home. I can all but guarantee 500K work from home customer service reps.
8. This plan SOLVES illegal immigration.  Many are forced to self-deport or seek citizenship (many currently don’t).  Now unnecessary illegal immigrants are being priced out or the market.  It is only truly the jobs that NO ONE will take, that illegal immigrants can afford to stay and do.  We’d ALL want them to stay.  No more “jerbs” bs.

The what abouts?

What about the criminally lazy guy who just wants to milk the system and never shows up for work?

Ok, for those that don’t understand Ebay or cred systems, I’ll game this out.

That guy right now hides amongst 30M good people who want to work.  The first step is to expose him.  The second step is ostracizing and singling him out.  The third step is firm but forgiving punishments until his behavior is altered.

On day one, he signs up with everybody else, and never shows up at job.  His feedback is bad, he gives an excuse, or he ignores it.  The bidder doesn’t lose anything.  He’s just disappointed. 

After 4 weeks of taking the $240 GI, never being rehired, and given negative feedback, the criminal lazy is suspended, cut off for 6 weeks on first infraction.  Where does he go?  How does he eat?  Who’s couch does he sleep on?

Now all around him are 30M people waking up and going to work, getting their GI + Bid. They are happily employed, they are choosing between multiple jobs.  They are productive members of society.

He lives amongst them and they hate him.  They are getting louder and angrier with him.  He’s no longer able to hide amongst them complaining about the bad economy.  His support system crumbles.

Finally he breaks, after 6 weeks, maybe then 12, maybe then 26, he is put back to auction, and if he is rehired, he’s back in the game!  Take pictures of the work he did, prove he arrived early, stayed late by his own choice!  The system quickly exposes any positive effort and rewards it.

What about the scumbag slave labor boss?

They are quickly exposed.  No one sells their labor to them.  Your real name. Your real reputation.  If you want to get “subsidized” labor, you better keep most of your hires happy.

What about criminal collusion between buyer and seller?

First, family can’t hire family. Cohabitants are out too.

But let’s say you and I are both criminally lazy and decide to collude.  I will give up my GI, so I’m out $280 every week to begin with.

I have to put in $40.  I bid, and you take the job.  You don’t show up.  You give me $40 back, plus some amount of the GI.

So instead of $240-400 you could earn doing lots of different kinds of jobs you might like, you have less than $200 for a no show job.  Meanwhile, I try to do this with 10 others as well.

We are both criminals, but the buyer  has committed a felony.   The punishment will hurt enough to deter the crime.  Hire more than one person, receive kick-backs,  and be found not requiring them to work in the eyes of society, you go to prison.

The criminal who didn’t show up, is suspended from GI for 6 months.

The machine can see the recurring pattern so it only takes a few criminals being made of in each local market.  Remember, the machine is already looking for rehires, since that is positive proof to future buyers.  Where are the time stamped before and after pictures?  Proof work was done?

And since you want to make more money that means proving you do great work, thats how you market yourself.

This gets to the idea of  “what is work” - the answer is easy, it’s what people will pay you with their own money to do and that you will do.  If someone will spend their money to pay you to dig holes and fill them up, that is work.

If however, the govt. used its money to hire you to dig holes, that wouldn’t be work, because no real individual spent their money.  That’s why the govt. cannot bid.  It’s also why public sector jobs are always slightly suspect to the private sector.

Finally, since the preponderance of goods and  services in ghettos are suddenly far less expensive, the truly lazy noble artists of the world, have the ability to coast without joining the GI plan.  

I don’t have an answer for I hired her to grow my pot in Colorado, nor I hired him to sleep with me in Nevada; except that states should really be the ones running this thing.  I’m just putting this out there as the only correct federal solution to a wide variety of seemingly intractable problems.  But you are you are buying their entire 40 hour week, so choosing to let them take time off, or hiring based on job completion, would need to be documented.

What about WalMart?

Since they cannot hire from the pool of GI workers, companies that currently pay minimum wage or near it, must now pay a premium to keep their workers from quitting and joining GI or fully automate.

Progressives should understand that having a choice of jobs profoundly changes the power structure without having to organize labor.

This is the neoprogressive labor moment.

What about the politics?

Every American middle class family who wants to bid on cheap labor loves it.  Those surrounded by ghetto blight loves it.  SMB owners love it.  The GOP loves it.   The 30M who desperately want to work love it.   The workers at WalMart love it.  The anti-immigrant Mickey Kaus Dem crowd will love it.  Silicon Valley will love it.

Public employee unions do not like.  Management at Fortune 1000 do not like. 

My plan delivers the protestant work ethic, ensures there are no idle hands, keeps all American talent expanding, and increases trust in a multicultural country.  It is a profoundly American way to extend the social safety net, without becoming France or pretending we’re all as innately chummy as the “you look like me” Nordics.


Some final discussion 

The basic problem with the American economy today is that a covered nut is a social justice construct.  We have determined we OWE one another a covered nut for being an American worker.

Yet the value of a person’s labor can never be defined by fiat.  More so, our workers are being competed with by global forces.

The cold brutal fact is many Americans aren’t worth what social justice crusaders are forced to pretend.  They have to stop pretending.

We cannot take what is a noble goal of a covered nut, call it a minimum wage and expect genius entrepreneurs to be able to make a return on every American.

My plan solves all of this.

We cover the nut with a GI out of taxes because of our social commitment.  Then to reduce the cost of the program, give entrepreneurs a honest competitive low end labor market, and provide lower cost services in poor areas, we auction the 30M.

If you struggle with grasping the likely market outcomes of this, just ask yourself, “what would I pay somebody $40, $60, $100 a week to do for me personally I don’t do now?”  

If you ask any questions please start with, ‘If I was bidding I could afford and would want to pay…”

Note: I’m not really interested in the Gun Control debate, and I don’t really want to be blogging topics of the day, I just want to get my encoded smallness GOV2.0 ideas down in one place on-line. But some stuff is just not being said. 

Beyond 34M assault rifles already in US market…

3D printing and micro-manufacturing soon makes the whole gun control issue moot.

Once we get over the fact that there is no solution possible in the near or long term future, we must ask what smart liberals hope to gain in all this…

Chris Hayes truly believes he’s got an insight: Conservatives will profile the mentally ill long before there is ever meaningful gun control.

Chris owes #UPPERS a deeper thought exercise.  IF the likely big govt. outcome from Newton is not limiting guns, but instead taking away privacy rights from the mentally ill…  does Chris still favor poking the government to act?

I don’t know the answer.  Perhaps, deep down, he will accept building a national database of the mentally challenged over the cries of the ACLU and Mental Health professionals, but I think he should be clear about it.

If from this tragedy, government infringes on health privacy, and sure enough, mass violence is REDUCED, profiling will gain greater credibility.

I’m not in favor of this, but if I have to choose between less guns or less privacy for the mentally ill, well Chris is forcing me to support his anti-privacy efforts.

Real game theorists game it out before they play for optimal outcomes.

On this issue, Chris doesn’t seem to be much of a game theorist.  Maybe his job is just to sell “Gun Control” to his audience, no matter the outcome.  Murdoch does this with Fox.

But Chris doesn’t brand himself as such. Maybe he is trying to warn the left off their cries for Gun Control, but if so he’s really soft selling it.

Next up: Can’t have Chris arguing profiling won’t work, so I’ll explain the technical ways we could most easily and humanely track the functional-mentally ill at the lowest cost.  Big data, visual systems, and outsourcing to the rescue.

SMB owners, especially the top 2-3% of SMB owners, are God’s chosen people.

Since Big Business = Big Government… conservatives should favor policies that systemically favor SMBs.

And I have mentioned in my first blog post, the recent growth of central state policies can be DIRECTLY blamed on the failure of the Fed to keep NGDP on a level target in 2008. The Fed’s economy so royally screwed, gave us Obama for 4 more years even after he shat Obamacare on us.

Repeat after me: When people are afraid, they need their mommy (government).

The smart approach is put the US economy at a nice, but unexciting level of growth, basically forever.  Market Monetarism insures we won’t have a economic catastrophe so nightmarish that a socialist can convince people there is a crisis in capitalism.

Without depressions and deep recessions, America will be a daddy only country (insert positive gay joke here).

So, right now, the Fed is currently printing money (QE), and using the fresh dollars to outbid anyone else for the T-Bills Goldman Sachs is selling.

Sumner admits these are free profits for GS, but wants to poo-poo it. The Austrians are enraged.

The question is moot.

INSTEAD, once we have NGDPLT in place, we should re-imagine the Fed injecting money into and removing it from the money supply.  We should turn it first and foremost into a futures system for SMB owners.

Here’s how it would work:

1. An SMB owner would deposit money into a Fed account.
2. He’d only be able to bet that NGDP was going to come in soft, but the odds / payoff would slightly favor the players, and not the house.
3. If NGDP comes in too soft (the economy is slowing down) the Fed prints the new money and pays off the SMB owners.
4. If NGDP comes in too strong (the economy is overheating) the Fed takes some money out of SMB accounts.
5. Generally, the odds are slightly in SMB owners favor, so much so, that being an SMB owner becomes the thing that the best and brightest want to do.

So not only does NGDPLT end crazy booms and busts, it helps out SMB owners exactly when things start to slow down.

At EXACTLY THE RIGHT MOMENT, when prices are just about fall, and small bear market opportunities avail themselves….

The SMB owners are FLUSH!  They can take their windfall winnings and go buy up something cheap, being sold off (hopefully by a Fortune 1000 as the economy cools down).

And when things are running a bit too hot, the Fed take a bit of the cash out of each SMB owner’s account…

And the SMB owners are AWARE!  Since, they get the first real taste that things are about to cool down, they are first movers to batten down the hatches.

There may be some arguments from economists that this may not be enough injection and removal from the economy to move the ball.

This is impossible.

When I say the odds slightly favor the SMB owners in the betting, I mean they will be pay whatever odds are necessary to get the majority of SMBs to use this system.

If after God’s chosen people have been serviced, the Fed has to buy /sell a few Treasury Bills from Goldman, who cares?

The new money goes to SMB Owners first, and that’s all that matters.

This is the recipe to make the GOP the Party of Fairness by Spring 2013:

1. Go over fiscal cliff.
2. Immediately insist Obama set all tax rates.
3. Demand SMB owners pay 25% less taxes in every tax bracket.
4. Demand there be no marriage penalty in any tax bracket.

As I have explained before, in a Republic (the brand of the Republicans), smallness must be encoded into the DNA of the system to survive.

The GOP needs to get back to its organic roots.  It is IMPOSSIBLE to have small government  without a thriving small business market.  

Big Business = Big Government.  100% of the time.

Americans LOVE Small Businesses (at minimum they hate the Fortune 1000).

But, they do not understand that the top 2-3% of SMBs are the most important part of the economy.

Every time Obama says 97% of the SMBs won’t have a tax increase under his tax plan, he is LYING to America by omission.

Make no mistake, this policy will benefit the Red State rich.  So even if the economy continues to move slowly, it will move American brains and money to smaller agency - which benefits Republicans.

Ending the marriage penalty is also fair, everyone will get this as well.

So Jan 1st 2013, we go over the cliff, the economy begins to seize up, but the GOP has fundamentally altered the discussion…

They are just protecting married people. They are just protecting Small Businesses AND ONLY SMALL BUSINESSES.

Let Obama flounder around arguing that all businesses are equal.

He’ll fold.

Morals for sale!

A recent argument with CATO’s Jason Kuzniki (who I really like) about libertarian strategy made my ass itch.

The basic flavor of his liberty and freedom is that they are super important, but he won’t do something JUST BECAUSE it makes government smaller.

Whereas I think Malcolm X libertarianism is the only justifiable approach to liberty.  

Libertarianism, by prototype design, negotiates from an assumed position of personal strength, not one of passive resistance. When attacked, the Swiss blow up their own bridges. Rand’s Atlas shrugs. Those are not the same thing. The Swiss aren’t saying the world won’t work without them, they are just sinking their own ship.

Get this straight right away, for all future conversations with hippie libertarians: It is one thing to not play the game. It is another to play to win - by any means necessary.

Admittedly, there are some libertarian extremists that preach ideological purity until the dollar is worthless and the US is being permanently warred on.

That’s ridiculous.  But so is the alt.libertarian crowd acting like Gandhi on the Potomac.

So in my discussion with Jason, I said the GOP needs go over the cliff and then offer to redo taxes where there are only two favored classes of Americans: 1) SMB owners 2) Married people

1. The GOP should offer to increase taxes on the non-SMB rich, so that SMB rich can get a giant tax break. Nudge the top 10 out of every 1000 to start SMBs.
2. The GOP insist taxes for married parents be lower than single parents and get even more lopsided as you have more children.  Nudge parents to marry.

Get ready for it: Some NUDGING is morally required of true libertarians.

Jason responded thusly:

https://twitter.com/JasonKuznicki/status/273451453388046337

Newsflash to CATO: Being a libertarian means being unseemly.

Look, in rational libertarian thought, the real question isn’t the subjective, “how much personal liberty do people have?”

The real question is objective and measurable, “how big is the government?”

As such, when you stand up and shake your individual fist at the state, when you nod to the phrase, “taxation is theft,” you are NOW involved in practical guerrilla warfare to defend against and ruin the plans of the enemy.  Just sitting around tut-tutting until eventually that which cannot go on, doesn’t - is not the ought (moral) thing to do, and it isn’t the should (strategic) thing either.

It really is this simple:

BIG BUSINESS = BIG GOVERNMENT.  So if we are dedicated to small government, we are going to encode favoritism of small agency into our laws.

On taxes let me be specific: the GOP ought to argue that SMB owners, at every level of taxation, should pay 25% less taxes.

This is no different then encoding state’s rights into our founding document, or encoding smallness into P2P software.  If you want a distributed agency system, you have to encode it directly into your DNA.

Small government is genetically like being a bird. If you are not encoded for feathers, you will not be a bird.  Small business is a  necessary condition of small government.

And like most things in life, this is a sacrifice.  Our man Jason has to wake up every day and be so greedy for small government and personal freedom, that he looks in the mirror and says,

“I will roll up my sleeves and slit the throats of single people and the Fortune 1000 rich, to give favor to those groups most likely to WANT SMALL GOVT.”

Jason, if we want to win elections, we need more voters likely to not need or want big government.

Once we win elections, and move the power to the states, then you can start talking about what is unseemly from your DC view.

If you don’t pay a great price, you can’t buy anything grand.  And those of us out here want to see your bloody hands.